Report 5 External factors that affect your business enterprise in the short run and long run.

Part I In the short run: 1. Give a brief description of GDPs annual growth during the last 3 years and projections for the next 2 or 3 years. According to Bangko Sentral Ng Pilipinas GDP growth for 2009 is 1.1 percent. For the economist, this is considered a good results as most countries were in a recessions during that time. The Philippines is one of the few countries that expanded despite the global meltdown that crippled most developed economies. One of the reasons is continued demand for Philippine labor overseas which helps sustained growth in remittances. It also financed most Filipino households purchase of property, cars and other big items. In 2010, GDP growth increased to 7.6 percent. It was the highest expansion since 1986. The recovery of global economy played a big part in the strong performance by helping boost exports and revive key industries. The strong growth also came during a period of peaceful political transition for the Philippines, as President Benigno Aquino easily won presidential elections in May 2010 and succeeded over Gloria Arroyo. The World Bank retained its forecast of a 5 percent GDP rate for the Philippines for 2011. It likewise kept the 5.4 percent economic expansion forecast for next year. The bank explained its outlook to strengthening of investments, private consumption and services sector. They also identified outsourcing, manufacturing, construction, mining, agriculture and merchandise sectors are growth drivers for the Philippine economy. However, the World Bank warned of smaller-than-expected remittances from overseas-based Filipino workers because of a stronger peso and weaker labor markets abroad, particularly in the U.S. and Europe. The report recommended a steady focus on reforms and for additional resources to bring the Philippines onto a more inclusive growth path. The World Banks forecasts are lower than the Philippine governments projection of a 7 to 8 percent yearly GDP growth rate for the country from 2011 through 2016.

2. Select at least 2 external factors in the short run (inflation, foreign exchange rates, T-Bill, interest rates, etc.) and describe their indicators/data in 2009, 2010, and 2011 in tables and graphs. INFLATION RATE

The Philippine annual inflation rate for 2010 is 3.8% this is in line with market expectations but near the low end of the central banks target range of 3.5% to 5.5%. However, this is slightly higher than 2009 inflation rate of 3.2%. the higher rates of price increases in food, beverages and tobacco (FBT) as well as clothing were offset by slower growth of fuel, light and water (FLW), services and miscellaneous items indices. According to BSP, we have a manageable inflation outlook; they just have to monitor the changes in global growth patters and shifts in investment. The BSP forecast for inflation for 2011 between 3.6% to 5% target range. The Philippine is one of few Asian countries which have yet to raise rates since the global financial crisis.

EXCHANGE RATE

The Philippine Peso continues to strengthen from 2009 to 2nd Quarter of 2011. The BP said that the strong inflows, which went mostly to pesodenominated government securities, came from top portfolio investing countries such as the United Kingdom, Singapore and the United States. The Philippine peso leads other Asian currencies in appreciating, going back to the 42-to-a-dollar level. 3. Explain why each factor is an opportunity (that is, it can increase sales/ revenues/ and/ or decrease costs) and/or threat (that is, it can decrease sales/ revenues and/or increase sales); as well why it is critical factor to your company. On Inflation rate: According to BSP, the significant factor behind the decline in the inflation rate was the drop in global oil prices which have not stopped falling as oilproducing countries started to feel the dramatic fall in demand. Automotive sales have started to drop significantly and more declines are expected, forcing oil and petroleum prices to fall from the historic high price per barrel. One of the business divisions of Panasonic Electric Works Philippines is Automation controls, where we offer relays, connectors, switches and sensor, applicable to electronics. Those products are mostly used is cars (for ignition, sensor for lights, wiper, etc.).

As the Philippine inflation rate increases, the sales of automotive products decline. Thus, it has a direct impact on the sales performances of our business as a whole. We could feel the decline in sales, because the purchasing power of peso decreases. On Exchange rate: Our selling price to customers are in US dollar, we offer and receive payment in USD currency. Unfortunately, we experience negative effects of stronger peso. We find ourselves at a disadvantage as imports become cheaper and we receive less peso in every dollar that was paid to us. 4. Explain how well (or badly) your company is responding to each of this opportunity and/or threat. During critical times, like when Automation control division is not meeting its target other divisions like Wiring Devices especially Wide Series being the main model should increase sales to overcome the gap of automation controls. Our main objectives are to meet our target as a whole PEW Sales Philippines. We also have to cut down some spending and implement so cots buster activities in order to adjust the losses in sales or due to exchange rates of USD to Peso.

Part II In the long run: 1. Select at least 2 external factors in the long run pertaining to population and its distribution (urban-rural, male-female, age), employment-unemployment, family incomes and their distribution, government laws and policies/programs, industrial condition and trends; and describe their indicators/data in 2009, 2010 and 2011 in tables and graphs. 2. Explain why each factors is an opportunity (that is, it can increase sales/ revenues and/or decrease costs) and/or threat (that is, it can decrease sales/revenues and/or increase sales); as well why it is a critical factor to your company. 3. Explain how well (or badly) your company is responding to each if this opportunity and/or threat.